Fed Punches Out Bears; Rates Collapse

“We just touched 2% core inflation to pick one measure. Just touched it for a few months and then we’ve fallen back,” Powell said from Washington. “So I think we would need to see a really significant move up in inflation that’s persistent before we would consider raising rates to address inflation concerns.”

I do not know why rates were edging higher the past two weeks, but they’re knifing lower now. The 10yr is off by 5bps to 1.78%. Aside from liking stocks here, I also like gold, not for defensive purposes — but offense.

Rates have correlated nicely with gold the past year and we have a shot at breaking or meandering inside the Fag-Box to the upside.

Aside from my guns drawn approach to stocks, I am also long TMF, double upside treasuries — because I believe. I believe in a world where rates are all negative and I can buy property with a negative yielding loan.

Markets have responded kindly to the Fed, no rape. The price of gold is hugging $1,500, at the same time bonds are spiking. I like it. I like it. I fucking like it.

In other words there is a higher risk on non payment as the economic picture gets worse, people continue to use their cards despite the exorbitant interest charges, and the asset has limited value when the credit card companies try to sell their debt off their balance sheets.